Hi partner,
As Wahaj said, we have to check two things.
- Whether "Notes (includes attachments)" has enabled for the entity.
- Whether this form already has a timeline.
Go to Advanced Settings > Customzations > Custom the System, expand Entities, click the custom entity. Check if the "Notes (includes attachments)" has enabled, if not, select it and save.

If "Notes (includes attachments)" has enabled, then when you new a main form for this entity, the new form will have a timeline by default.
In addition, you need to check if the form already has a timeline. Since a form can only have one timeline, if a form already have a timeline, then the timeline option greyed out.